Bank Branch Closures

Nia Griffith Excerpts

Thursday 30th June 2016 Commons Chamber

[Christian Matheson]

My hon. Friend makes an extremely useful point, and if he will bear with me, I may come on to say more about some of the areas that are suffering the most from these bank closures.

As my hon. Friend has perhaps alluded to, we need to recognise that for many—the elderly, people with caring responsibilities, and small business owners—high street banks’ programmes to close many of their smaller branches and centralise everything in the centre of large towns create havoc for individuals and businesses and damage local communities.

My interest in this issue was prompted by a spate of branch closures in the Hoole area of Chester. Last summer, NatWest announced it was closing its branch there. The excuse was that the branch was underused. Yet I and my team undertook a scientific survey of usage by standing outside and counting people going in over several hours that flatly contradicted the suggestions made by NatWest. HSBC had already gone in Hoole, and it was followed more recently by Lloyds, leaving only a Barclays branch as the so-called last branch in town. Bank branches around Chester had been closed previously, including in the Boughton and Saltney districts.

All our banks are now in the centre of Chester, which has several profound effects. First, it increases traffic into the city centre. Ours is already a congested city built on the beautiful River Dee, but when the Romans founded it and when it became a bustling market town in the middle ages, nobody thought to design it with the needs of 20th and 21st-century car use in mind. Keeping satellite branches is, strangely, good for the environment. More importantly, satellite branches support local businesses.

[Nia Griffith (Llanelli) (Lab)]

My hon. Friend hits on the point that it takes up a lot of small businesses’ time if, instead of banking locally, they have to go to another town where the traffic is piling up. That is the complaint I have heard from people in Cross Hands because that is what they will be forced to do when their bank closes.

[Christian Matheson]

I thank my hon. Friend for her intervention, and I was about to make exactly the same point.

People drop into shopping areas such as Hoole to go to the bank and then perhaps to one of the local shops. Incidentally, Hoole recently won the outstanding award from the “Great British High Street” awards, for which I thank the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones). I would be grateful if the Minister passed on my thanks to him.

The bank is very much part of the ecology of the local high street. If we take it away, we damage that ecology and the other small businesses that rely on it for increasing custom, as people pop to the bank and then to one of the small shops. We rely on it, too, to provide easy access to banks for small businesses, as my hon. Friend the Member for Llanelli (Nia Griffith) pointed out. Small businesses feel able to put up a small “back in 10 minutes” sign on their door in the middle of the day as they pop down to the local bank to get change or pay in money, but they would not feel able to put up a “back in two hours” sign if they were they forced to go into the city centre of Chester or indeed any large town. It is tough running small businesses and time away from the shop is business time lost.

For all the advantages of internet banking—and there are many—the blunt truth is that a small business cannot pay cash into the bank through a laptop computer. I cannot help but wonder whether all of this is made worse because of the advertising these banks use. No wonder HSBC moved away from calling itself “the world’s local bank”; yet we still have Lloyds bank saying that it has been “by our side” for 250 years—at the same time as it closes its Hoole branch. It is not by our side any more in Hoole, I am afraid. The very untruths of the advertising campaigns, claiming to be local and supportive of local small businesses, while making access to branches harder, exacerbates the crisis that we face—and it is a crisis.

Reuters reported last week that 600 branches closed in the 12 months to April this year. There is a social division in these closures. It says that more than 90% of the closures were in areas where the median household income was below the British average of £27,600, according to an analysis of Office for National Statistics data on average incomes in the locations where branches were closed. By comparison, five out of the eight branches opened by these banks over the same period were in some of the wealthiest neighbourhoods in Britain: Chelsea, Canary Wharf, St Paul’s, Marylebone and Clapham, all districts in London. That is right: despite the onward march of technology, banks are still opening new branches, but in highly affluent areas.

The Reuters report cites concerns from campaigners that

“banks are cutting too fast in places where people are less able to fall back on digital banking services because of a lack of access.”

That reminds me of the words of my good friend the hon. Member for Ynys Môn (Albert Owen) about the different ways in which access to banking services might be prevented. Problems can be caused by people’s finances, the lack of physical access or the inability to use the internet. The report quotes Fionn Travers Smith of Move Your Money, which campaigns for ethical banking. She says:

“We are witnessing the creation of a dual financial system: one for the middle class and wealthy and another for the poor.”

Indeed, I have found that one of the groups to be hardest hit by the recent closures in Chester are pensioners, not necessarily the most tech-savvy group—although I do not want to make assumptions—who now have to make the journey into the centre of my city.